Until 2021, Kentucky was in the minority of states without an educational choice program. Then, in March 2021, Kentucky enacted the Education Opportunity Account Program: an expansive program to gives thousands of low- and middle-income families in Kentucky greater educational choice as early as the 2021-22 school year. The Institute for Justice is intervening on behalf of two Kentucky parents, Akia McNeary and Nancy Deaton, who intend to use the program to obtain the education that will best meet the needs of their children.

The program is available to families earning up to 175% of the U.S. Department of Agriculture’s income cap for reduced-price lunch. Eligible families may receive Education Opportunity Accounts: accounts that they can use on a wide array of educational expenses, including tutoring services, online learning programs, classes or extracurricular activities provided by a public school, and tuition for dual-credit college courses. Families in counties with 90,000 or more residents can also use their accounts to pay for private school tuition.   

The Education Opportunity Account Program is funded entirely by private donations. The state offers a tax credit to private donors for their contributions to non-profit account-granting organizations (AGOs). The AGOs, in turn, fund families’ accounts with those donations. On June 7, 2021, the Council for Better Education (CBE), a group representing Kentucky public school districts, filed a lawsuit challenging the program’s constitutionality under the Kentucky Constitution. The lawsuit echoes common arguments used in legal attacks on school choice programs.

The Institute for Justice, the nation’s leading advocate for school choice, defended the program on behalf of two parents of children who are eligible to receive Education Opportunity Accounts under the program. Unfortunately, the Kentucky Supreme Court sided with opponents of the program and declared it unconstitutional in December 2022.

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The Kentucky General Assembly passed the Education Opportunity Account Program in 2021. The Commonwealth thus joins the majority of states that have educational choice programs. Kentucky’s program is available to families earning up to 175% of the U.S. Department of Agriculture’s income cap for reduced-price lunch. Those families are eligible to receive Education Opportunity Accounts (EOAs) to use for a wide range of their student’s educational needs, including tutoring, extracurricular activities, technology, and dual-enrollment in higher-education courses. In counties with over 90,000 residents, accounts may also be used to help pay for private school tuition. Money for the accounts comes entirely from private donations and is administered by private non-profit account-granting organizations (AGOs), who must prioritize applicants with the most demonstrated financial need. Donors to AGOs are eligible to receive a tax credit, with the total amount of statewide tax credits capped at $25 million annually.

Public school districts, however, apparently see themselves as threatened by giving more opportunities to parents. An organization representing public school districts has teamed up with two local school boards, and also with individuals represented by one of the nation’s largest teachers’ unions, to challenge the program in court. By seeking to block Education Opportunity Accounts, they hope to deprive low- and middle-income Kentucky families of opportunities their wealthier neighbors already enjoy.

Because Kentucky’s EOA program empowers families to make educational choices, the Institute for Justice (IJ) has teamed up with two parents who plan to use accounts as soon as the program is up and running. As it has done successfully numerous times in the past, IJ has intervened in the pending lawsuit to defend the program.

IJ’s Parent Clients
Akia McNeary
Akia McNeary has three school-aged children. One attends public school. Another attends a private school on a scholarship after struggling in public school. The youngest is beginning kindergarten this year, and although Akia knows the private school is the best option for her, Akia and her husband cannot afford the tuition without assistance. Akia’s family is eligible for Kentucky’s EOA program, and she hopes to use EOAs to provide college dual-enrollment courses for her public-school child and to pay private-school tuition for her two younger children.

Nancy Deaton
Nancy Deaton is the legal guardian of her great-grandson. He has physical and emotional challenges but has thrived in his small Catholic school. Nancy’s great-grandson is eligible for the EOA program, and without an EOA she fears she will no longer be able to afford his tuition.

The EOA Program Is Constitutional
In the lawsuit against Kentucky’s EOA program, the challengers allege four constitutional infirmities. First, they allege that the program violates the General Assembly’s duty to “provide an efficient system of common schools” by supposedly diverting public money to private schools. But the program does not change how public schools are funded at all, nor does it allocate a dime of public money because all funds going to EOAs are private donations to private non-profits. If the challengers believe Kentucky’s public schools are inadequately funded, they may sue the General Assembly to demand better funding, but depriving lower-income Kentucky families of privately donated money to cover their educational expenses has nothing to do with providing adequate funding to the state’s public schools.

Second, the lawsuit alleges that the program violates the Kentucky Constitution’s restriction that tax money may not be “raised or collected for education other than in common schools” without a referendum. But, again, the EOA program does not raise or collect any public money. To the extent the program’s related tax credits reduce individual taxpayers’ liability, they are no different from the many Kentucky tax incentives already on the books for everything from college tuition to film production. Whatever the effect those credits have on the total amount of money the state raises for its general fund, none of them alters any particular appropriation in the state budget, and certainly not the specific appropriations to public schools.

Third, the lawsuit alleges that the EOA program runs afoul of constitutional provisions requiring that state laws serve a public purpose. Yet it is hard to imagine a more public purpose than supporting lower-income Kentucky families’ educational needs. And the Kentucky Supreme Court has repeatedly upheld programs that support individual students’ education, even if they happen not to attend traditional public schools. Although some court decisions have restricted giving state resources directly to private schools, the EOA program does not do that because all of its money comes from private donations, and any choice to spend it on private schooling rest entirely with individual families.

Fourth, and finally, the lawsuit alleges that by enacting the EOA program, the General Assembly improperly delegated its legislative authority to the private AGOs that administer the education opportunity accounts. But the AGOs were not given any legislative authority; they simply establish EOAs with private donations. Unlike a legislature, they cannot order private citizens to do anything and have no control over public money. To the extent the General Assembly delegated anything to AGOs, it was the kind of purely administrative tasks to carry out the legislature’s wishes that the General Assembly routinely delegates without any constitutional problems.

About the Institute for Justice
The Institute for Justice is the nation’s leading law firm protecting educational choice. Since its founding in 1991, the Institute has successfully defended school choice programs in numerous state supreme courts, intermediate courts of appeal and trial courts, as well as twice in the U.S. Supreme Court.

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